South Korean Government Believes Real-Name System to be Working Effectively

The South Korean government introduced the real-name system for user accounts on crypto exchanges at the end of January this year, effectively banning anonymous user accounts from trading cryptocurrencies to fund illegal activities like money laundering, among others.

The real-name system was one of the Korean’s government’s latest measures to deal with terrorism funding and money-laundering activities. It also aimed to curb any speculative investment into digital currency. However, since its introduction, the measure has been criticized a lot because only a few domestic banks decided to offer existing user accounts to real-name ones. According to reports, the conversion rate is very low, and the banks offering the service have limited it to the country’s leading crypto exchanges: Bithumb, Coinone, Korbit, and Upbit.

Nonetheless, the Korean FSC (Financial Services Commission) said:

The frenzied buying of bitcoin and other cryptocurrencies seen in January this year in South Korea has been fizzling since the government banned anonymous trading of cryptocurrencies.

The government is also going step up monitoring, it said. At a P2P loan review meeting that recently took place, Kim Yong-beom, the vice chairman of the FSC, said that the real-name system so far only applies to crypto exchanges that receive anonymous accounts at banks, Hankook Ilbo reports. Kim added that majority of exchanges still use corporate accounts.

The FSC also said that it is now going to step up monitoring of transactions between local and foreign exchanges, the Korea Times reports, adding:

The new guideline, which aims to prevent local cryptocurrency exchanges buying virtual coins at foreign exchanges to launder money, will come into force on July 10 for one year.

The FSC also revealed that it is going to keep a close watch on bank accounts used by crypto exchanges to park all their expenses.

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